Ad Industry’s Media‐Buying Practices Scrutinized Federal Prosecutors

Investigation probes whether advertising agencies received rebates from media outlets. Federal prosecutors in Manhattan have opened an investigation into media‐buying practices in the advertising industry and have begun issuing subpoenas as part of the probe, according to people familiar with the matter. The investigation is looking at,
among other things, nontransparent ad‐buying practices, including agencies receiving rebates from media outlets, the people said.

Ad companies such as WPP, Omnicom, Publicis, Interpublic and MDC Partners Inc. disclosed that some subsidiaries were subpoenaed by the Justice Department, which is investigating whether agencies have manipulated the bidding process by urging independent companies to increase prices so that contracts could be awarded to the agencies’
internal production and postproduction shops. Ad companies said they were cooperating with the investigation.

Price‐fixing and bid‐rigging are prohibited under federal antitrust law. The status of that investigation is unclear. A spokesman for the Justice Department declined to comment.